- How to Read Singapore Form IR8A
- Sample Form Image
- Gross Salary, Wages
- Director’s Fees
- Contributions made by the employer to any pension
- Employee Stock Option
- Central Provident Fund (CPF)
- Tax Borne by Employee
- Singapore Income Reporting
- I contribute to the Central Provident Fund (CPF). How is this handled on my US tax return?
- Singapore Financial Accounts
- Singapore Businesses & Investments
- Opening a local business in Singapore as a US citizen
- Sole Proprietorship
- Partnerships, LLPs, and LPs
- Singapore Savings Bonds
- Social Security and Pensions in Singapore
How to Read Singapore Form IR8A
Your Form IR8A (provided by your employer) indicates your income and amount of taxes paid for the year.
Sample Form Image
Gross Salary, Wages
Report the total amount of the annual Gross Salary in the Income > Wages > Income Outside of the U.S. section.
Bonus payment received during the tax year - should be reported in the Tax Questionnaire under the Income > Wages > Income Outside of the U.S. tab as a component of Gross Wages. For further detail, please click the corresponding help link (green question-mark) in the TQ.
Your director’s fee should be reported as self-employment income only if you are self-employed ( Income > Self Employment).
If you are an appointed director in the corporation this income is added to wages.
If you own 10% or more shares in the corporation this income is still reported as wages. You also must file Form 5471. Ownership in the foreign corporation should be reported in the TQ under the Income > Corporation & Trust > Foreign Corp. tab. To display this tab, click Change Income Types at the left then select I have a corporation or trust > I own 10% or more of a foreign corporation.
If your employer provided the allowance on top of direct salary (car, education, home leave, etc.) please report this in the TQ under Income > Wages > Income Outside of the U.S.
Contributions made by the employer to any pension
Contributions made to a foreign employer pension plan - The IRS considers it as a part of the annual compensation - unless there is a country-specific Treaty Exemption (for example UK, Belgium, and the Netherlands). Report these contributions in the TQ under the Income > Wages > Income Outside of the U.S.
Employee Stock Option
If you participate in a company Employee Ownership Plan and are issued matching shares for your own contribution, these shares are considered as Stock-Based Compensation. They are reported separately from your regular income. Please report your employee stock ownership on the Income > Wages > Income Outside of the U.S. section, question Did you receive stock-based compensation from your employer?
Central Provident Fund (CPF)
Singapore Social Security - Expatriates are not mandated to pay into the CPF unless they gain permanent residency in Singapore. Contributions to the Social Security fund should be reported in the Tax Questionnaire under the Taxes & Deductions > Taxes Paid tab.
Tax Borne by Employee
The amount of income taxes you paid during the calendar year should be reported in the TQ under the Taxes & Deductions > Taxes Paid.
Singapore Income Reporting
I contribute to the Central Provident Fund (CPF). How is this handled on my US tax return?
The Central Provident Fund (CPF) is the statutory authority that administers Singapore's public pension system. Central Provident Fund is complemented by voluntary retirement savings, there is no Social Security system in Singapore.
Mandatory CPF contributions are tax-exempt for both the employer and employee in Singapore. The same applies to pre-retirement and retirement withdrawals from the accounts.
Contributions to CPF go to three accounts:
- Ordinary Account (OA)
- Special Account (SA) dedicated to old age
- Medisave Account collecting funds for health coverage
In the US, employer contributions to Ordinary Account (OA) must be added to annual taxable income.
Contributions to SA and Medisave Accounts are not included in US taxable income as they substitute for the Social Security contributions.
Singapore Financial Accounts
Which types of Singapore financial accounts must the U.S. individual report on FBAR / FATCA?
- Individual bank accounts such as savings accounts, checking accounts, and time deposits.
- Retirement accounts.
- Brokerage accounts, commodity futures or options accounts.
- Insurance policies and annuity contracts with a cash value (i.e. such as a whole life insurance policy).
- Business accounts where U.S person has a greater than 50 percent interest in the entity.
Which types of Singapore financial assets are not required to be reported on FBAR / FATCA?
- Social Insurance,
- Real Estate Holding,
- Precious metals held directly,
- Financial Account held at a US branch of a foreign financial institution.
Singapore Businesses & Investments
Opening a local business in Singapore as a US citizen
Of course, before opening a local business in Singapore, you must have the right to live and work in Singapore. You will need to secure a proper visa (i.e. an EntrePass). For details regarding work permits, you can contact Singapore’s Ministry of Manpower. What’s more, you must decide on your business structure, a vital decision which determines the liability of your business debts and tax obligations.
What types of local business structures are there in Singapore, and what would be the US filing requirement?
Singapore has several types of business structures including sole proprietorship, partnership, limited liability partnership (LLP), limited partnership (LP), and company. You will need to contact the Accounting & Corporate Regulatory Authority (ACRA) in order to register your company.
A sole proprietorship is a business run by a single owner who possesses full control and assumes personal responsibility of the company’s liabilities. As a sole proprietor, you are self-employed. You will need to report your self-employment to the IRS via form Schedule C.
Partnerships, LLPs, and LPs
As previously mentioned, there are 3 types of partnerships including partnership, limited liability partnership (LLP), and limited partnership. Each partnership type will need to be reported to the IRS via Form 8865.
Partnerships can have up to 20 members. Each member of the partnership is personally liable for the debts of the partnership and the debts of the other partners.
Limited partnerships (LP) do not have a limit to the number of partners and there are 2 types of partners: general and limited. Unlike general partners, limited partners are not personally liable for business debts, they are not required to take part in the business, and they must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Unlike the partnership and LP business structure, all partners in the limited liability partnership (LLP) have limited liability in regard to business debts.
The Company (Corporation) business structure has two forms: private and public. A private company may have up to 50 owners. However, a public company has an unlimited number of owners. The company must have at least one shareholder and director. The company will need to be reported to the IRS via Form 5471.
Singapore Savings Bonds
Singapore Savings Bonds (SSB) are virtually risk-free, as the Singapore government backs the bonds and there are no penalties for early withdrawals (with one month's notice). Of course, such low risk is ideal for expats and investors. You can report the interest income from your SSB in the passive income section of the tax questionnaire.
Social Security and Pensions in Singapore
The Central Provident Fund (CPF) is an account-based social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. Expatriates are not mandated to pay into the CPF unless they gain permanent residency in Singapore. Contributions to the CPF are made by both employers and employees.
The employer and employee contributions are allocated to various accounts including Ordinary Account (OA), Special Account (SA), Medisave Account (MA), and Retirement Account (RA). The OA can be used for property acquisition, insurance, investments, and education. The SA is the CPF account for pensions, as its main purpose is retirement savings (old age and investment-related financial products) for individuals under the age of 55. Once the participant reaches the age of 55, the SA becomes an RA. MA is basic medical insurance.
In addition to the CPF, Singapore also has the Supplementary Retirement Scheme (SRS). This voluntary scheme is utilized to save for retirement above and beyond the CPF. Although the SRS is used by salaried income earners, self-employed expats can utilize SRS to build their pension funds as well. The SRS contributions may be used to purchase various investment instruments including unit trusts, ETF, shares, bonds and for the exercise of company stock options.